Question: 1. What is the advantage of issuing bonds instead of obtaining financing from the company's owners?
2. What are the duties of a trustee for bondholders?
3. What is a bond indenture? What provisions are usually included in it?
4. What are the contract rate and the market rate for bonds?
5. What factors affect the market rates for bonds?
6. Does the straight-line or effective interest method produce an interest expense allocation that yields a constant rate of interest over a bond's life? Explain.